The impact of an AT&T/DirecTV deal on sports

By now, you have already heard of the whopping $48.5 billion purchase of DirecTV by AT&T. The numbers are staggering. The combined AT&T-DirecTV company would become the second largest television provider behind Comcast-Time Warner Cable which announced their own megadeal earlier this year.

Should the Feds approve the AT&T deal, the impact on sports would be widespread. There’s the obvious factor and that’s DirecTV’s rights for the out-of-market NFL Sunday Ticket pay per view package. DirecTV is in the midst of negotiations with the National Football League and the company says it’s close to renewing the package that it has had since 1994. The satellite provider talking with the NFL for several months and was reportedly close to signing late last year.

If DirecTV does not renew, AT&T could elect not to purchase and exit for a substantial fee, meaning one of the biggest media deals in American history hinges on the NFL. At this point, that seems highly unlikely. Should the deal go through, could AT&T negotiate to extend NFL Sunday Ticket to U-Verse subscribers? That also seems highly unlikely. But with AT&T about to take over, perhaps those renewal discussions could pick up the pace and end sooner than later.

One of DirecTV’s attractions has been its commitment to sports, but in recent years, it has been reluctant to pick up new league-owned and regional networks citing the high cost and not wanting to pass it along to consumers. Comcast SportsNet Houston, SportsNet LA, Pac-12 Networks, Longhorn Network and SEC Network have been left off DirecTV systems over their per subscriber cost. DirecTV was slow to pick up the home of the Los Angeles Lakers, Time Warner Cable SportsNet citing its price.

Now with AT&T about to take over, perhaps those networks will start appearing on DirecTV. SEC Network already has an agreement in place with AT&T for its U-Verse systems. Pac-12 Networks signed a carriage deal last year. It has joined DirecTV in not picking up CSN Houston and SportsNet LA. However, the refusal to pick up these networks could ease once AT&T takes the reins.

But the impact over sports is not limited to carriage pick ups. DirecTV also owns three regional sports networks, Root Sports Northwest (owning rights to MLB’s Seattle Mariners and MLS’ Portland Timbers), Root Sports Pittsburgh (Pirates and Penguins) and Root Sports Rocky Mountain (Colorado Rockies). Unless the Feds rule that those networks be sold, AT&T would probably keep all of the networks and their programming.

And DirecTV also owns minority stakes in MLB Network and NHL Network which were part of the agreement to pick up both channels.

So you can see the enormous influence of a combined AT&T/DirecTV on sports television. Should the proposed deal be approved by the Feds, the impact it would have on regional sports networks would be felt throughout the cable industry.

There’s also talk of over the top services and expanded broadband for consumers, but that is in the preliminary stages.

Industry observers are keeping an eye on the deal and what it could mean for customers. Yes, higher prices are also likely as competition falls by the wayside. The AT&T deal is an example of a big fish getting bigger while keeping up with the Joneses.